Understanding the Management Process

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1 Chapter 6 Understanding the Management Process 1 Define what management is. 2 Describe the four basic management functions: planning, organizing, leading and motivating, and controlling. 3 Distinguish among the various kinds of managers in terms of both level and area of management. 4 Identify the key management skills of successful managers. 5 Explain the different types of leadership. 6 Discuss the steps in the managerial decision-making process. 7 Describe how organizations benefit from total quality management. 1

2 What Is Management? The process of coordinating people and other resources to achieve the goals of an organization Material resources The tangible physical resources an organization uses Human resources The people who staff an organization and use the other resources to achieve the goals of the organization Financial resources The funds an organization uses to meet its obligations to investors and creditors Information resources The information about external business environmental conditions that a firm uses to its competitive advantage 2

3 The Four Main Resources of Management FIGURE 6-1 Managers coordinate an organization s resources to achieve the goals of the organization. 3

4 Basic Management Functions The Management Process FIGURE 6-2 4

5 Planning Planning Establishing organizational goals and deciding how to accomplish them Mission A statement of the basic purpose that makes an organization different from others Strategic planning The process of establishing an organization s major goals and objectives and allocating the resources to achieve them 5

6 Planning (cont d) Establishing goals and objectives Goal An end result that an organization is expected to achieve over a one- to ten-year period Objective A specific statement detailing what an organization intends to accomplish over a shorter period of time Properly set goals are Set at every level in the organization Consistent (supportive) with each other Optimized (balanced) to reduce conflicts between goals 6

7 Planning (cont d) SWOT analysis The identification and evaluation of a firm s Strengths Weaknesses Opportunities Threats Core competencies Approaches and processes that a company performs well and may give it an advantage over its competitors 7

8 Elements and Examples of SWOT Analysis FIGURE 6-3 8

9 Planning (cont d) Types of plans Plan An outline of the actions by which an organization intends to accomplish its goals and objectives Strategic plan An organization s broadest plan, a guide for major policy setting and decision making Tactical plan A smaller-scale plan to implement a strategy Operational plan A plan to implement a tactical plan Contingency plan A plan of alternative courses of action if the organization s other plans are disrupted or become ineffective 9

10 Types of Plans FIGURE

11 Organizing the Enterprise Organizing The grouping of resources and activities to accomplish some end result in an efficient and effective manner Leading and motivating Leading Influencing people to work toward a common goal Motivating Providing reasons for people to work in the best interests of an organization Directing The combined processes of leading and motivating 11

12 Controlling Ongoing Activities Controlling Evaluating and regulating ongoing activities to ensure that goals are achieved FIGURE 6-5 Control function 12

13 Kinds of Managers Levels of management Top manager guides and controls the overall fortunes of an organization Middle manager implements the strategy and major policies developed by top management First-line manager coordinates and supervises the activities of operating employees The coordinated effort of all three levels of managers is required to implement the goals of any company FIGURE

14 Areas of Management Specialization Other areas may have to be added, depending on the nature of the firm and the industry FIGURE

15 Areas of Management Specialization Financial managers Responsible for an organization s financial resources Operations managers Manage the systems that convert resources into goods and services Marketing managers Responsible for facilitating the exchange of products between an organization and its customers or clients Human resources managers Manage an organization s human resources programs Administrative managers (general managers) Not associated with any specific functional area; provide overall administrative guidance and leadership 15

16 Key Skills of Successful Managers FIGURE

17 Key Skills of Successful Managers (cont d) Key management skills Conceptual skills Ability to think in abstract terms Analytic skills Ability to identify problems, generate alternative solutions, and select the best solution Interpersonal skills Ability to deal effectively with other people Technical skills Needed to accomplish a specialized activity 17

18 Key Skills of Successful Managers (cont d) Key management skills (cont d) Technical skills Needed to accomplish a specialized activity Communication skills Ability to speak, listen, and write effectively 18

19 Leadership The ability to influence others Leadership versus management Formal leadership Legitimate power of position is the basis for authority Informal leadership Not recognized formally by the organization authority 19

20 Styles of Leadership Autocratic Task-oriented style; workers are told what to do and how to do it, they have no say in the decision making process Participative All members of a team are involved in identifying essential goals and developing strategies to reach those goals Entrepreneurial Personality-based, the manager seeks to inspire workers with a vision of what can be accomplished to benefit all stakeholders 20

21 Which Leadership Style Is Best? Matching style to the situation Effective leadership depends on Interaction among the employees Characteristics of the work situation The manager s personality 21

22 Managerial Decision Making The act of choosing one alternative from among a set of alternatives Major steps in the managerial decision-making process FIGURE

23 Managerial Decision Making (cont d) Identifying the problem or opportunity Problem The discrepancy between an actual condition and a desired condition Opportunity A positive problem Problem-solving impediments Preconceptions about the problem Focusing on unimportant matters while overlooking significant issues Analyzing symptoms rather than causes Failing to look ahead 23

24 Managerial Decision Making (cont d) Generating alternatives Brainstorming Encouraging participants to come up with new ideas Blast! then refine Reevaluating objectives, modifying them if necessary, and devising a new solution to a recurring problem Trial and error Selecting an alternative Satisficing Choosing an alternative that is not the best possible solution, but one that adequately solves the problem 24

25 Managerial Decision Making (cont d) Implementing and evaluating the solution Requires time, planning, preparation of personnel, and evaluation of the results An effective decision removes the difference between the actual condition and the desired condition If a problem still exists, managers may Decide to give the chosen alternative more time Adopt a different alternative Start the process all over again 25

26 Managing Total Quality Total Quality Management (TQM) The coordination of efforts directed at Improving customer satisfaction Increasing employee participation Strengthening supplier partnerships Facilitating an organizational atmosphere of continuous quality improvement Benchmarking evaluating another organization that is superior in order to improve quality Issues crucial to TQM Top management commitment Coordination of efforts 26

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